Wednesday, July 07, 2010

The heat is on...

Well, yesterday's rally withered in the East Coast heat wave and Europe looks pretty weak this morning. Again trading should be light as the big boys head up to Nantucket for the week.

Trending news...

* The June ISM Non-manufacturing index was at 53.8%, down from 55.4% in May - and below expectations of 55. The employment index showed contraction in June at 49.7%.

* The credit default market is heating up again and European countries seem to be on the menu again.

* Lots of signals that the economy is slowing. The great question before us is - will we have another round of stimulus to save the day or have the politicians lost their appetite for stimulus plans?

* Further evidence that the stock market is no longer a viable investment tool for most - "An analysis by Abel-Noser indicates that the US stock market has now become a concentrated pool in which the top 99 stocks account for 50.09% of total domestic trading volume. In June, the top 20 stocks accounted for 28.94%". That is an insane amount of trading volume in a small number of stocks.

* Great article on what Apple really thinks of their customers. "Angry customers have been told that buying a rubber bumper at a cost of around £25 will cure the problem. This weekend it emerged that Apple staff have been instructed not to provide these bumpers even though the problem stems from a design fault. In a leaked memo, helpline staff for AppleCare have been told: "We ARE NOT appeasing customers with free bumpers – DON'T promise a free bumper to customers."

* Mortgage applications dipped again last week, while refinancings picked up.

Go enjoy the heat today.

******* The market caught wind of a rumor that the European stress tests of Greek bonds was going to require a fairly modest mid-teen haircut and that sent the markets spiraling higher. By markets, I really mean the 20 or stocks that compose the bulk of trading, but that's another story. This might start shaking some of the bulls back into the market if we approach 10k again.

******* Wow, earlier in the week I said we might see crazy trading with the rookies in charge. That was fairly evident today as the robots and freshly minted grads from Princeton all jumped back into Citibank with both hands. The question remains - is this the start of something greater?

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